Already mired in debt, the agency best known for the Bright Nights holiday festival lost city funding for executive director Judith A. Matt’s $84,000 salary in January 2004, then received a bill for $188,000 in city services in March.

By October, three board members had quit, citing differences with Matt’s vision.

“We will not only survive,” said Matt amid speculation the non-profit agency – with the fitting acronym SOS – had served its last pancake. “We will thrive.”

Eight years later, the Spirit of Springfield has not only survived, but is thriving. Matt’s salary has nearly doubled to $160,500, thanks to a state bailout, corporate donations and the enduring popularity of the Bright Nights holiday festival.

Beginning its 18th year, Bright Nights returned to Forest Park on Nov. 21 with its second largest opening-night crowd and more than twice as many lighting displays than in 2004. Bright Nights will continue nightly through Jan. 1.

Coinciding with this year's opening, the Yahoo! Travel website ranked the 3-mile trail through Forest Park among the top 10 holiday lighting attractions, along with Rockefeller Center in New York City, Disney World in Orlando, and the Miracle Mile in Chicago.

Judith A. Matt

“We’re in the best place we’ve ever been now,” said Matt, so closely identified with Bright Nights that the license plate on her red Mercedes-Benz sedan reads “BRT-NTS.”

For all its success, though, the Spirit of Springfield still operates on a financial tightrope, bringing in millions from the Bright Nights festival, but often reporting year-end losses in filings with the state attorney general’s Division of Public Charity and the U.S. Internal Revenue Service.

Despite its precarious finances, Matt’s salary has climbed steadily since 2004, with large increases between 2008 to 2011, a period when many non-profits were forced to cut back on spending.

In 2011, Matt earned $142,452 in salary and $18,048 in benefits, more than Springfield Mayor Domenic J. Sarno and top executives at Springfield Symphony Orchestra, CityStage and the Springfield Museums Association, according to tax filings reviewed by The Republican.

The agency’s vice president, Amy Barron-Burke, was paid $83,077 in salary and $11,768 in benefits for that same period, while office assistant Kristen Anderson earned $44,964.

For 2010, Matt’s total compensation was $153,303, while Barron-Burke received $86,924 and Anderson, who has since resigned, earned $38,351.

To her many supporters, Matt’s salary is hardly excessive, given her role in producing so many of the city’s signature events.

“Without Judy, there would be no Spirit of Springfield, no balloon parade, no pancake breakfast and no Bright Nights,” said Stuart Hurwitz, a past board member and director of the Springfield Civic Center who now owns two restaurants in Springfield.

“She literally works around the clock to make these things happen,” he said.

Between Bright Nights, the July 4th fireworks, the Parade of Big Balloons, the World’s Largest Pancake Breakfast and other events, an estimated 10 million people have been entertained in SOS-sponsored event since 1989, making it the city’s unofficial, non-profit cheerleader.

Equally important, the events bring in millions of dollars annually for the regional economy while boosting Springfield’s national profile.

In 2011, for example, the festival was named one of the top 100 events in North America, joining New Orleans' Mardi Gras celebration, the Cherry Blossom Festival, in Washington, D.C., the NCAA basketball championship and other events honored by the American Bus Association, a Washington, D.C.-based trade group,

In 2003, a study by the International Events and Festivals Association estimated Bright Nights alone contributed $7.3 million to the regional economy – a figure now estimated at $10 million.

With less fanfare, the agency organizes and hosts city events, from mayoral inaugurations and police and fire cadet graduations to the anniversary of the June 1, 2011 tornado.

In June, following the burial of slain Springfield police officer Kevin Ambrose, the Spirit of Springfield hosted a private outdoor reception at Court Square for many of the 8,000 officers who attended the funeral from across New England.

For its services, including rounding up donations from dozen of corporate sponsors, the Spirit of Springfield charged its standard fee: Nothing.

“It was an honor to do the reception” after Ambrose’s funeral," Matt said. As for more routine city events, “if the city asks us, we say yes; the goodwill is priceless,” she added.

As a winter attraction, Bright Nights has developed into a seasonal counterpart for the Eastern States Exposition in September, Six Flags New England and autumn foliage tours, Goldberg said.

“They’ve been able to build a great following around Bright Nights and maintain it while providing a hallmark winter event,” Goldberg said.

“It really fills a niche for us,” she added.

Still, Matt’s compensation is more than earned by executives at some well-known area institutions with comparable or larger budgets.

In 2011 – the most recent year in which figures are available - Springfield Symphony Orchestra’s executive director Michael Jonnes was paid $59,836.

As executive director and president of the Springfield Museums Association, Joseph Carvalho III, who has since retired, was paid $129,000 for the same period.

At CityStage, former executive director Cynthia Anzalotti earned $158,946. Anzalotti has also since left her posts.

Figures for their successors are not yet available.

Daniel F. Walsh, chairman of the Spirit of Springfield’s governing board, said Matt’s performance has been remarkable, especially considering that she operates with a two-person staff and no taxpayer support.

In determining her salary, the volunteer board of directors considers the multiple roles she plays in each project, from creative director, project manager, publicist and fund-raiser.

“I know what her salary is, and the board knows what her salary is - and she’s worth it,” said Walsh, general manager of the Sheraton Springfield at Monarch Place. “When you consider everything she brings to the table, the salary is very reasonable."

The agency’s existence dates back to Springfield’s late-1980s budget crisis, when voters rejected funding for the Mayor’s Office of Community Affairs, which Matt managed for four years.

At the urging of community leaders, Matt formed the non-profit Spirit of Springfield in 1989 to resume and eventually expand the activities of its city-run predecessor.

With limited public funding, the agency increasingly relied on in-kind-services and fund-raising by Matt and the board of directors, including prominent business figures like the late Peter L. Picknelly, of Peter Pan Bus Lines.

The debut of Bright Nights in 1995 changed all that.

From the opening Saturday night that drew 1,488 cars and created block-long traffic backups along Sumner Avenue, it was clear that Spirit of Springfield had a big-time money maker.

No civic event in Springfield has generated the income that Bright Nights does.

But a detailed breakdown of the festival’s expenses has never been made public; as a self-funding non-profit organization, the Spirit of Springfield must report its income in broad categories to state and federal regulators, with only its governing board and auditor getting a closer look at its balance sheet.

In 2008 and 2009, the first years in which the agency provided summaries of Bright Nights finances, the event took in a total of $1,402,666, mostly from admission fees ranging from $15 to $21 per vehicle.

Expenses, meanwhile, were $1,304,448, including lighting, exhibit maintenance, police patrols and fees paid to the city for use of Forest Park.

The total profit was $8,212 – less than 1 percent of the $1.4 million collected from two events.

Walsh, chairman of the agency’s governing board, said Bright Nights expenses are closely monitored, and the overall cost is more than justified by the event’s quality and long-running popularity.

“It has to be spectacular,” Walsh said.

The agency’s finances, however, have been a recurring concern, as a rift between Matt and board members in 2004 illustrated.

Hurwitz, the former SOS board director, said some members were worried about the mounting debt, especially the $188,000 for work performed by police and other city employees.

To collect its debt, the city began requiring monthly payments of $9,402.47 – a figure the agency struggled to meet.

At the time, Springfield itself was fending off bankruptcy, and in no position to bail out Matt’s agency, Hurwitz said.

“There was concern that the whole thing would turn into a fiasco,” said Hurwitz, who eventually left the agency’s board due to other commitments.

“But it didn’t. Judy was confident and she was right,” he said.

A $200,000 state grant arranged by state Sen. Gale Candaras, D-Wilbraham helped wipe out the deficit. Corporate donors, including Massachusetts Mutual Life Insurance Co., Hasbro and Big Y Foods, increased their support. Marketing also expanded, helping to bring in bus tours from across New England and beyond. And, labor costs were scaled back.

Picknelly also stepped up, writing a $10,000 check; in the agency’s financial records, the gift is referred to as a “non-repayable loan” from a board director.

Three months later, Picknelly, 80, died of a heart attack.

“Peter was wonderful,” Matt recalls. “He helped us when we needed it the most.”

Despite the dire predictions, Bright Nights has retained its luster as a winter attraction, drawing strong crowds even during the 2008-2011 recession.

With the festival’s 20th anniversary approaching, Matt is already drawing up plans for 2014. “It’s going to be something grand,” she said.

For his part, Hurwitz also sees a bright future for the festival.

“You’ve got to give Judy credit,” he said. “I didn’t think it could go this long, but people keep coming.”